The latest jobs numbers are out from the U.S. Bureau of Labor Statistics. What do they mean for job seekers, employers and investors? Here’s a quick take from Glassdoor Senior Economist Daniel Zhao:
The longest streak of monthly jobs growth in American history has ended. After 113 months of solid jobs growth, the labor market is coming to a screeching halt. Today’s report from the Bureau of Labor Statistics showed a net loss of 701,000 jobs, much worse than expectations. The unemployment rate increased from 3.5 percent—a 50-year-low—to 4.4 percent—the highest rate since 2017.
Despite surging more than expected, the unemployment rate is not capturing the full impact of the coronavirus outbreak. The number of Americans working part-time for economic reasons surged by 1.45M and an additional 1.76M workers dropped out of the labor force, workers who would not be counted in the unemployment rate. Additionally, data released after the report’s reference period shows almost 10 million Americans have filed for unemployment insurance, enough to raise the unemployment rate to near 10 percent.
The decline in payrolls was largely driven by leisure and hospitality (-459,000 jobs), temporary help services (-49,500) and retail (-46,000), the industries hardest hit by the outbreak. Notably, health care and social assistance also lost 61,000 jobs—while the coronavirus outbreak does demand more healthcare workers, there are many healthcare workers not directly involved with the coronavirus response who have been laid off.
While today’s report doesn’t capture the full picture, it is an ice-cold splash of reality, showing the impact of the coronavirus in the government’s most reliable labor market statistics. The data we’ve seen in the last few weeks alone reminds us that the labor market will get worse before it gets better.
113 months was the longest ever stretch of monthly jobs growth in American economic history, averaging 196K jobs added per month. We came close to ending it in early 2019 (saved only by Census hiring) but the streak is now officially over.
Service industries that rely on in-person interactions were hardest-hit. In particular, leisure & hospitality (-459,000 jobs) and retail (-46,000).
The unemployment rate spiked up to 4.4 percent from 3.5 percent—a 50-year low. But that understates the number because many affected workers dropped out of the labor force or have had their hours cut. Additionally, the BLS reported that many survey respondents misreported their status, enough to raise the unemployment rate to 5.3 percent.
Wage growth was largely unchanged, accelerating slightly to 3.1 percent. Don’t expect much change here—note how in the Great Recession, pay growth actually increased. Mechanically, if workers have hours cut but keep the same hourly wage, average hourly earnings will stay the same. Additionally, if lower-wage workers are laid off, the economy-wide average will go up.
To speak with Daniel Zhao about today’s jobs report or to discuss labor market trends, contact pr at Glassdoor dot com. For the latest economics and labor market updates, follow @danielbzhao on Twitter and subscribe to Glassdoor Economic Research.